The Court of Appeal in its decision of 10th July, 2025 reported on the Case Report of The Law Platform Library as TLP/CA/2025/01 has granted an Appeal brought by Finali Ltd, owners of Airport Hills Estate against Prestea Sankofa Gold Ltd.

In the case numbered H1/40/2025 with title Prestea Sankofa Gold Ltd v Elizabeth Essuman & Finali ltd the Court of Appeal in the voice of the learned Doctor of Law, Justice Dr. Ernest Owusu-Dapaa J.A has ruled that third parties do not have privity of contract in land transactions based on the covenant of consent from a lessor for the transfer of interest to third parties with the said consent not to be unreasonably withheld.

The Court of Appeal in this novel pronouncement on this area of law has thus disentitled a person from suing a lessor for consent for the transfer of interest held by a sub lessor or an assignor to the said person. The facts that led to this pronouncement in this virgin area of law in land law by the Ghanaian Court of Appeal is that the Plaintiff entered into an assignment of the leasehold of the 1st Defendant house owner of her property situate in the plush Airport hills residence.

Per the lease agreement between the Appellant, Finali Ltd and the 2nd Defendant, Mad. Essuman, both parties covenanted per clause 2(xix) as follows: (xix) Not without the previous consent in writing of the Lessor to charge or to mortgage at law or in equity, assign, underlet or part with the possession of the demised premises or any part thereof or any building or buildings thereon or any interest therein, such consent not to be unreasonably withheld.

Upon breaches to estate rules by the Plaintiff/Respondent in the Estate of the Appellant, Finali Ltd refused to grant consent for the assignment which Mad Essuman had already done, received payment for and the Plaintiff, taken possession.

The Plaintiff, Prestea Sankofa Gold Ltd sued Mad. Essuman and Finali Ltd for Finali Ltd to issue consent for the assignment between the Plaintiff and the 1st Defendant among others. The High Court granted the reliefs of the Plaintiff which was short lived owing to the appeal launch and granted against same.

At the Court of Appeal, in unanimity, the Court found that the main issue was whether or not there was privity of contract between the Estate and the Appellant. The Court answered the question whether or not the said covenant usually found in land deeds as per clause 2 xix of the lease agreement between the Plaintiff and Mad Essuman purported to create a benefit for a third party.

The Court in its analysis of privity of contracts held that privity does not exist based on the said covenant of consent for transfer of interest and section 5 of the Contracts Act which seeks to empower third parties to sue on contracts they have beneficial rights in. Therefore a party can only sue a lessor or an assignor and not a head lease upon such a covenant.

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